3. Barriers to Adoption:
a. Z-Wave vs. ZigBee
I am confused as to which standard is better to adopt…is one head and shoulders above the other? Which one has better marketplace acceptance? From the consumer’s standpoint, which is the better solution, and should the consumer care?
With Z-Wave there are over 700 interoperable products, over 9 different door locks alone that interchange with each other. This is because Z-Wave products are interoperable at the product level. With ZigBee products very few of them interoperate at the product level. Yes, they interoperate at the radio level, the radios talk to each other, but the products are not interchangeable.
The customer should care, they get more choice with Z-Wave, virtually all alarm companies in North America support the Z-Wave Standard. In addition, AT&T supports the Z-Wave standard, Verizon supports the Z-Wave standard, Lowe’s supports the Z-Wave standard, Alarm.com supports the Z-Wave standard. To be fair, some of these companies also “support” a ZigBee product or two but closer examination will show that these are products proprietary to that single company’s solution. One such example is the “ZigBee” lighting products provided with the Lowe’s Iris solution; they are proprietary to the Lowe’s system. Most customers purchasing the Lowe’s system are selecting Z-Wave lighting products because they have more choice.
How will these competing platforms deliver value for the consumer?
The platforms don’t really compete. ZigBee is used for proprietary solutions where Z-Wave is used for open, interoperable solutions. Z-Wave is optimized for inside the home use, we don’t try to do meters, industrial and large commercial applications. Z-Wave outsells ZigBee 10 to 1 in residential automation solutions. Z-Wave’s value is in the interoperability at the product level that provides alarm, telco and homeowners the choices they are looking for.
b. Installation
I talk with plenty of people who’d love to install these systems but they are intimidated by the installation. How is the industry addressing this issue, especially in light of the NEST thermostat product, which is hitting installation ease as a product feature?
As an industry we are all looking to make installation easier. Some types of products are easier to install than others. Thermostats are easier than in-wall lighting controls as they are low voltage. All of the complexity in the NEST product, there to make it seem less complex, is due to the way thermostats are powered. This is one of the reasons the NEST is as expensive as it is. With Z-Wave we make the radios much less power- consuming than the WiFi radio in the NEST product letting our manufacturers to make battery-powered thermostats that can go 2 to 5 years on a few AA batteries. The NEST has to be powered with a 24V transformer; hence all of the extra terminals and electronics to make it “fool proof.” The NEST is a beautiful piece of engineering but overly complex and expensive.
A visit to Lowe’s a few weeks ago was interesting as some of these products were on the shelf, but store staff really did not know much about selling the value of home automation; they knew that you needed a controller, but not much about the differences between systems and potential installation issues. How is the industry approaching retail training?
Right now the Industry isn’t doing a good job with retail training. Each manufacturer is doing (or not doing) their own thing. The Z-Wave Alliance has a working group that is addressing this by creating some training and on-line materials aimed at helping manufacturers create training programs. Most of the training that is available today is through distribution channels like ADI, Worthington, HomeSeer Smarthome.
4. Mobile Device Convergence
a. Ingersoll Rand is going with a single platform that ties all of its brands together, while single-solution players like Yale Locks are going with Alarm.com as a solution. Which strategy has more upside potential, and can the single-solution players compete on an equal footing with respect to mobile device support?
I’m not understanding the question, Ingersoll Rand has pulled together a sub-set of Z-Wave certified devices that they choose to market with their gateway and backend services. Their gateway and backend services will work with all Z-Wave certified products.
Alarm.com is for the most part a back-end service provider to the security companies. They sell the communications link, 3G or Broadband, and the cloud services. Their product supports all Z-Wave certified products.
Yale, or any other Z-Wave certified product can choose to be a part of one or more “bundles” or choose to market “one-off” or do both. The beauty of having guaranteed interoperability is it provides the manufacturer of a certified product many paths to market. They can choose to limit their product to a self-branded solution, or go out into the open market. Ingersoll Rand has Schlage and Trane which they distribute as a part of the NEXIA solution. They also sell these same products as individual devices that find their way into other bundled programs and as “over-the-counter” products.
If you have a certified product you can play with any Z-Wave system including those with mobile support. You do not have to produce your own mobile device support “back-end” to prosper.
Analysis
It seems pretty clear here that Z-Wave is the predominant standard in this market. Home automation in the US is currently a $2.4 billion market, and is expected to grow to $5 billion by 2015.
The hardware companies, like Yale and Schlage, are interested in generating new sales by adding new features and differentiating high-end products.
Alarm companies are interested in selling Z-Wave home automation products as they are currently installing Z-Wave controllers in your home, and providing remote monitoring, via your alarm. Adding locks, shades, thermostats and lighting modules allows them to capture some additional value and sales by satisfying the needs of current customers, as well as to provide some degree of differentiation of their value offer. Alarm companies are in the lead in selling and installing these products.
Homeowners are looking to make it easier to access the home, to control thermostats more discretely and to monitor and control alarms using mobile devices. Installation concerns are holding some back; others opt for the alarm company solution; still others self-install and use Nexia or Mi Casa Verde or M Control solutions.
I decided to install the Nexia system in my house, as Nexia offers a bundled solution and backend systems, along with customer support, and I was able to install the system for significantly less than the alarm company was going to charge me. I also had more control over the actual hardware that was installed. Stay tuned for my next article, which goes into the Nexia system and hardware installation process.
Check out the Z-Wave Alliance website here.
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